Correlation Between Bumi Serpong and Pakuwon Jati
Can any of the company-specific risk be diversified away by investing in both Bumi Serpong and Pakuwon Jati at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bumi Serpong and Pakuwon Jati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bumi Serpong Damai and Pakuwon Jati Tbk, you can compare the effects of market volatilities on Bumi Serpong and Pakuwon Jati and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bumi Serpong with a short position of Pakuwon Jati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bumi Serpong and Pakuwon Jati.
Diversification Opportunities for Bumi Serpong and Pakuwon Jati
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bumi and Pakuwon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bumi Serpong Damai and Pakuwon Jati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakuwon Jati Tbk and Bumi Serpong is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bumi Serpong Damai are associated (or correlated) with Pakuwon Jati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakuwon Jati Tbk has no effect on the direction of Bumi Serpong i.e., Bumi Serpong and Pakuwon Jati go up and down completely randomly.
Pair Corralation between Bumi Serpong and Pakuwon Jati
Assuming the 90 days trading horizon Bumi Serpong Damai is expected to generate 1.13 times more return on investment than Pakuwon Jati. However, Bumi Serpong is 1.13 times more volatile than Pakuwon Jati Tbk. It trades about 0.02 of its potential returns per unit of risk. Pakuwon Jati Tbk is currently generating about 0.0 per unit of risk. If you would invest 91,000 in Bumi Serpong Damai on August 24, 2024 and sell it today you would earn a total of 8,500 from holding Bumi Serpong Damai or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bumi Serpong Damai vs. Pakuwon Jati Tbk
Performance |
| Timeline |
| Bumi Serpong Damai |
| Pakuwon Jati Tbk |
Bumi Serpong and Pakuwon Jati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bumi Serpong and Pakuwon Jati
The main advantage of trading using opposite Bumi Serpong and Pakuwon Jati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bumi Serpong position performs unexpectedly, Pakuwon Jati can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pakuwon Jati will offset losses from the drop in Pakuwon Jati's long position.| Bumi Serpong vs. Alam Sutera Realty | Bumi Serpong vs. Ciputra Development Tbk | Bumi Serpong vs. Summarecon Agung Tbk | Bumi Serpong vs. Pakuwon Jati Tbk |
| Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Alam Sutera Realty | Pakuwon Jati vs. Lippo Karawaci Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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